Cygnett Hotels targets turnover of Rs 300 crore by end of FY25

The company operates an eponymous brand as well as brands such as Cozzet. Primarily a mid-sized hotel business, this week it also announced the launch of a new five-star hotel brand, Anamore.

Sarkar said the company has 25 operating hotels, mainly in second-tier cities, with a total of 1,000 rooms. The company has operations in Pushkar and Jaipur in Rajasthan, Kharagpur in West Bengal, Chail in Himachal Pradesh, Dibrugarh in Assam, Maharashtra 23 hotels are being planned in Mahad and Alibaug and Gurgaon in the state.

“We are first focusing on contracting hotels in seven sister states in eastern and northeastern India, mainly in tier-II cities. We are starting with an asset-light model where 95 per cent of the portfolio is under management contracts and the rest are as franchised properties,” he said .

The company has also invested in a 15-acre land in Vrindavan, Uttar Pradesh, where it will build a wellness resort. “Once we achieve the 100-property mark, we will also consider going the IPO (initial public offering) route within the next five years and will have both owned and managed properties,” he said.

In 2019-20, the company’s total revenue was $100 crore, which fell sharply due to covid-19 outbreak $300 million in 2020-21.

expansion boom

By 2025-26, 15 hotels are expected to open, taking the number of rooms to about 3,700. “Every month, we try to open a new hotel,” he added.

In January, the company opened a hotel in Jaipur. In February this year, it will open a hotel in Mahad, Maharashtra. Next up will be a five-star luxury resort in Pushkar that will focus on hosting large weddings.

“What we’re seeing is that after the covid-19 pandemic, consumers’ spending power has increased and people are spending a lot more, which has helped drive up average room rates. That has really increased the demand for hotel brands like this The opportunity is ours,” Sarkar added.

The company first opened in 2014. The majority of its portfolio operates on hotel management contracts. This week, the company announced the signing of a contract for a 150-room five-star villa resort in Goa near Manohar International Airport, which will be operational by 2026.

In a management contract, owners sign off on a hotel management business to conduct day-to-day operations on their behalf in exchange for a fee.

Given the current growth trajectory, Cygnett aims to add 1,000 keys per year over the next five years. By 2029, Cygnett’s hotel portfolio will expand to more than 100 hotels with more than 9,000 keys.

Earlier, the company was part of the American Red Lion Hotels Company, which operates the Signature Inn hotels that Signit brought to India. In 2016, the two companies parted ways, with Cygnett beginning to build a hotel brand under its own name.

Industry prospects

Ratings agency Icra said that on the basis of high growth in 2023-24, the hotel industry’s revenue will grow by 7-9% year-on-year in 2024-25 and 6-8% year-on-year in 2025-26.

The agency also expects a modest improvement in premium hotel occupancy rates across India, which is expected to rise from 70-72% in 2025-25 to around 72-74% in 2025-26.

The average room rate (ARR) of luxury hotels is expected to increase by 8% year-on-year $7,800-8,000 people in 2024-25, touch $There will be an increase of 8,000-8,400 people in 2025-26.

Icra’s sample group, which consists of 13 well-known hotel chains, is expected to achieve strong operating margins of 31-33% in 2024-25 and 2025-26, compared with 33% in 2023-24 and 2020 pre-COVID-19. -twenty two%.

Key demand drivers in 2024-25 include strong domestic leisure travel, meetings, incentives, conferences, exhibitions (MICE) and weddings business, as well as a steady rebound in business travel, despite a brief dip during the election period.

Additionally, growing interest in spiritual tourism and second-tier cities is expected to play an increasingly important role in 2025-26.

While domestic tourism has been the key growth driver in 2024-25, foreign tourist arrivals (FTA) are yet to recover to pre-pandemic levels, with recovery dependent on the global macroeconomic climate.